There was an infectious air of optimism, energy and pride at the Vigyan Bhavan as Prime Minister Narendra Modi launched the “Start-up India” initiative, the first of its kind to boost new-age entrepreneurship. Its action plan looks like a mini-budget accompanied by promises and words of courage from policy-makers. It takes statesmanly imagination to paraphrase Swami Vivekananda’s “Arise, Awaken” call into a 21st Century corporate mission, and Mr. Modi deserves due credit for it. There is little doubt that it catches the pulse of India’s young entrepreneur community.
Finance Minister Arun Jaitley positioned his government as the antithesis of the Licence Permit Raj as he stood on a podium that had a cool Silicon Valley-like slogan (“We Unobstacle”). The presence of international and home-grown “can-do” entrepreneurs is seen as a coming-out party for an India long seen as a land of cyber-coolies who write cheap software code turning into one that builds innovative, world-class companies. Mr. Jaitley suggested that the entrepreneurial fervour in India may be a new engine of growth amid clouds over economies in parts of the world. In the spirit of disruption, the government’s action plan in some ways pre-empted the next budget as it promised a no-tax-on-profits regime for start-ups for three years, exemption from capital gains for money ploughed back into start-ups, easy registration, lower patent charges, a Rs 10,000-crore start-up fund and an easy exit policy for shut-downs. That is like a dream come true for angel investors and venture capital funds who fuel start-ups.
However, reality checks are in order. The day-long event also saw some hard questioning on whether the current wave of Internet-driven start-ups are in a financial bubble, understandably so given the memories of the “dotcom” meltdown. Also, it is legitimate to wonder how the start-ups as defined by the government and enjoying special goodies are treated as a subset of small and medium enterprises (SMEs). For the government, the challenge is to see that it removes obstacles in a fair way, so that blue-eyed boys of the industry do not run roughshod over their less fancied entrepreneurial cousins or help tax evaders exploit legal loopholes meant to encourage risk-taking innovators and job-spinners. As an old saying goes, a revolutionary is a dreamer with his feet firmly on the ground.